How to Budget as a Single Mom

Budgeting is an important skill for everyone. But for the single mother—who is typically supporting herself and her children on a basic or even inadequate income—it’s a critical necessity.

The good news is that you have all the tools you need to get started right now. The only thing you need (if you don’t have it already) is motivation and a little discipline. Many people actually find budgeting kind of fun, once they get the basics down.

The Basics

The basics of budgeting is the tedious part. You need to know how much you make (that’s pretty easy, especially if you get a regular paycheck), and how much you spend. This is called your “cash flow”—how much money comes in, and how much money goes out.

The tedious part is figuring out how much you spend, because you need to devote some time tracking all your expenses. This will be the hardest step, but it will only be hard for the first month or so. The longer you do it, the more information you have to project (estimate) what you will spend the next month, and the next. Before you know it, you’ll be able to predict 6 months or a year into the future what your expenses will be. And that’s where budgeting starts to get fun—playing “what if” by shifting numbers around to see how you can meet goals (like buying a house, or taking a vacation).

But that’s all for later. First let’s look at how you get through those first couple of months and start taking control of your expenses.

You’ll need a way to record your expenses every day. An easy way to do this is to carry a notebook and write down everything you spend (everything!). If you like doing things on the computer, feel free to transfer the information at the end of each day or each week—but don’t think you’ll remember all your expenses each day and be able to recall them at the end of the day.  Don’t worry yet about what “category” the expense falls under—just make sure you note what the money was for.

After a week, review your expenses and assign them to categories that make sense to you. If you think ice cream belongs under “entertainment” instead of “food” or “treats”, that’s fine—but remember that making distinctions like that will force you to comb through grocery store receipts to categorize every item. Budgeting should be easy enough that it doesn’t become a second job in itself. Here is a list of common categories that you can choose from. Remember that if they don’t make sense to you, they won’t work, so mix and match or combine categories to reflect your actual thinking about spending:

Now You’re On Your Way

Repeat this activity every week until you have a month’s worth of data. By that time, you will have paid credit card bills, rent or mortgage, and utilities—those should be included in your list of expenses. Then look over your expenditures for the month. The fixed expenses you can’t do anything about—that’s why they’re fixed. There might be small gains you can make in some things like utilities, but at this stage of the budget game, don’t worry about it.

A good combination of essential expenses to shoot for is 30-15-15. That’s:

  • 30% of your income on housing: includes rent or mortgage, utilities, maintenance and so forth.
  • 15% on food: it’s recommended you keep this to necessary food, the kind you buy at the grocery store. If you shop wisely, that should make all other food (restaurant meals, lattes, lunches bought at work instead of prepared at home) fall neatly into the “entertainment” category. It’s much easier to cut back on this category.
  • 15% on transportation: includes car payments, insurance, fuel and maintenance.

That leaves 40% of your income to cover clothing, insurance and/or medical payments, entertainment, debt repayment, and miscellaneous. Part of that “miscellaneous” should be some kind of savings plan.

For more information like the above, visit the following site for tons of budgeting advice, tools, articles and more:

Paying Too Much?

If your figures for the month show that you’re paying significantly more than 30% for housing, you need to take some action. If you can’t think of any easy solutions that will work for you (such as taking in renters, moving in with family, and the like), here are some links to housing assistance programs that might be able to help:

HUD – Housing Choice Vouchers Fact Sheet

Local HUD Information by State
Homeownership Vouchers

If you find you’re spending much more than 15% of your income on food, it’s possible you’re not doing everything you could be to minimize this expense. Here’s some helpful links on how to cook nutritious and enticing food your kids will eat, and that will also help a lot in your budgeting efforts:

If your expenses fall within the ranges above, good for you! You’re completely average! Now why not do even better in the savings category by trimming items you really don’t need from the other categories? The only sure-fire way to make money is to save money.

Does the whole budgeting process sound too boring for you? Don’t fret—there are many like you. You don’t like to nit-pick about expenses, but at the same time you need to get control of your spending. The following story is a more philosophical view of budgeting from someone who managed to rein in her spending without becoming an accountant in a little green cap:

Get The Kids Involved

One important thing to keep in mind when budgeting as a single mother is that most likely, you’ll have to cut back somewhere. That “somewhere” might be things that your kids are used to having, like cable TV, or lots of snacks in the house, or maybe spending money that you don’t keep track of. It’s important to share with your kids that the family’s budget needs to be under control, and they might have to give up some of these goodies. Don’t worry—they might make a fuss about it, but if you’re firm and keep explaining to them that giving up a little now, might prevent giving up a lot later, they should be capable of understanding.

Or maybe you’ll have better luck choosing a savings goal that the kids can help meet, with a reward at the end that they’ll be thrilled about. For instance, if your family can save $100 on groceries in the next two months, let the kids decide how to spend some portion of that savings on something they want.

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